Digital Ecosystems: Connect The Supply Chain
Updated: May 11, 2020
The first of two blogs exploring the power of digital ecosystems where AI, robotics and other Intelligent Automation systems become central to the future growth of Freight, Transport and Logistics operators
Freight, transport and logistics (FTL) operating models are being turned upside down by today’s lightning-fast business change. Traditional models that have underpinned the industry for so long are unlikely to survive the disruptive forces now in play.
A new wave of digital technologies, for example, such as the cloud, Internet of Things and data analytics are forcing FTL organisations to rethink how they do business. Emerging distribution competitors like Amazon are putting more pressure than ever on the industry to be more agile and customer-centric. Meanwhile, the emergence of Corona Virus is exacerbating macro-economic factors in the shape of trade wars and the potential slowdown of the global economy – Chinese growth is now at its lowest for 30 years – threaten FTL revenues and margins.
Where there are threats, however, there are opportunities. These disruptive forces, while challenging, offer an ‘in the moment’ opportunity to rethink traditional operating models and build target models geared to the future. By thinking differently, FTL organisations can create new relationships between people, processes and technology; reduce complexity; become more agile and insight-driven; and innovate more quickly. The end result: prosperity efficiency and growth.
One particular technology is especially important to this business transformation: Intelligent Automation. Now, automation is not new to the FTL industry. It’s been used for many years in support of streamlined data entry, transaction processing, lines of business automation and other cost-saving initiatives. But these have largely been focused on the optimisation of the FTL back office – and haven’t always delivered the promised leap in productivity.
Electronic data interchange (EDI) also offered the promise of automated data sharing, but has struggled under the weight of so much data, a lack of visibility and inability to scale.
Removing the repetitive and releasing supply chain innovation
Intelligent Automation is a new form of automation. It draws on breakthrough technologies such as artificial intelligence (AI), machine learning (ML), robotic processing and data analytics to remove the manual and repetitive, so teams are free to focus on innovation. Intelligent Automation eliminates complexity so the business is back in control, and it delivers a better customer experience.
According to Accenture, reporting on the FTL sector, “Automation will increase the automation level to almost 100% in the transport planning and customer invoicing processes, leaving almost no activities to human beings anymore.”
Crucially, Intelligent Automation can transform a conventional FTL supply chain into a digital supply chain, re-imagining the complex, overlapping processes and infusing them with intelligent technologies. It connects all the physical assets that make up the supply chain – including with external partners – to the digital model to extend visibility, control, operational efficiency and informed decision making.
Take the retail clothing industry, for example, where garments are typically manufactured, shipped and delivered to retail stores (or online fulfilment warehouses) at great speed in response to customer demand. However, there is minimal visibility into this end-to-end supply chain process. Each process step – manufacturing, collection from the manufacturer, international shipment, delivery to the warehouse and the logistics of getting the garments to the store – appear as a patchwork of complex, siloed data. Staff are caught up in manual, routine supply chain management tasks, data is scattered across the supply chain, delaying the supply chain and reducing control.
With Intelligent Automation it is very different. Technologies like AI, ML and predictive analytics enable smarter, more flexible and agile ways of working that bridge all the different infrastructures that lay inside and outside a retail clothing a company’s initial data set. Repetitive processes are automated, the FTL organisation can learn from human exception handling, while analytics finds data patterns to support decisions and predict the future.
The result? A single, holistic view of the supply chain – in this example from clothing manufacture to sale on the retail floor. Using Intelligent Automation, the supply chain is faster, less complex – and staff are liberated from manual work to focus on innovation and adding business value.
It’s no surprise therefore that KPMG reports enterprises will spend more than $230 billion globally on intelligent automation technologies, tools and solutions by 2025, up from just $12 billion in 2018.
Intelligent Automation connects the holistic FTL supply chain
Intelligent Automation can help drive an integrated supply chain in other ways too. For example, it can automate specific repetitive human tasks, such as warehouse order picking and autonomous forklifts and other self-piloted equipment in warehouse operations – potentially including drones.
Moreover, Intelligent Automation can streamline and accelerate customer-facing manual processes that are holding the business back. For example, a customer can generate an order in a cloud-based electronic logistics marketplace, with the order being automatically transferred to the shipper. Following this, transport planning and execution take place between the shipper and carrier. While the goods are in transit, the automated system provides constant updates on the status of the consignment to all parties involved.
It’s not suggested that Intelligent Automation is the single ‘silver bullet’ to deliver this seamlessly integrated supply chain. Many other factors are at play, including operational, customer and other systems. Make no mistake though, Intelligent Automation gives FTL organisations the opportunity to think holistically: to connect every component of the supply chain into a single, unified system for success.
Now is the time for action too. Whilst many IT and business decision-makers have already adopted some form of ‘automated digital operations’ or are committed to the concept, non-adoption will place organisations in a weaker competitive position and impact their ability to serve customers.
Innovation allows organisations to become more efficient, expose new business opportunities and focus on the things that make it a great partner to do business with and a great place to work. Intelligent Automation, driven by data at the intersection of technology, people and processes, empower the FTL workforce to imagine, create and improve, while giving organisations the control they need to achieve continuous, disruptive improvement.